Effective Organizational Communication and Its Roles in Mitigating Shariah Non-Compliance Risks for Malaysian Takaful Operators (TOs)

By Hafiza Harun & Rusni Hassan

ABSTRACT

Highly effective organization is associated with the internal strength which refers to effective communication. Malaysian Islamic Financial Institutions (IFIs) are governed by the Shariah Governance Framework (SGF) which serves as the guiding route in achieving a sound system and overall confinement to Shariah compliance requirements. Thus, it is vital for IFIs including Takaful Operators to ensure all the organizational organs playing their oversight, accountability and responsibility including communication related roles and applicable scopes effectively. Communication aspect is worthy important in improving the implementation gaps of Shariah governance practices which are highlighted by researchers. This includes the mitigation of Shariah non-compliance occurrences within each of IFI. Therefore, this study empirically examines the organizational communication aspects in Malaysian Takaful Operator (TO). A set of questionnaires is distributed to a selected group of staff in one TO In Malaysia to assess their thoughts on the subject matter. The study finds the overall organizational communication is effective thus helps the institution to mitigate risks for IFIs especially Shariah non-compliance risk.